- Decision
- Lower
- Rate change
- 50 bps
- Key policy rate
- 15%
The Board of the National Bank of Ukraine cut the key policy rate by 50 bp to 15.0% effective 30 January 2026, opening an easing cycle on evidence of sustained disinflation and reduced external-financing risks while reaffirming its commitment to steer inflation to the 5% target over the policy horizon. After lifting the rate to 15.5 % in March 2025 and keeping it unchanged through December, this is the first move in the past year. All other operational rates were lowered concurrently. Headline and core inflation slowed to 8 % y/y in December; the central bank foresees inflation easing to 7.5 % by end-2026, 6 % in 2027 and reaching 5 % in 2028, even as expectations remain relatively high. Real GDP growth is projected at 1.8 % in both 2025 and 2026, constrained by war-related energy damage, though lending continues to expand by more than 30 % y/y. An EU EUR 90 bn support package for 2026–27, continuing ERA loans and a planned USD 8.1 bn IMF programme are expected to keep international reserves near USD 65 bn by end-2026, supporting FX-market stability and enabling gradual liberalisation. The ongoing full-scale war, energy-sector disruptions and potential fiscal pressures remain the key inflationary risks, yet the baseline envisages further gradual rate reductions; the next monetary policy meeting is set for 19 March 2026.
Rate evolution
Over the period, the National Bank of Ukraine held its key policy rate at 15.5% through 2025, cut it by 50 basis points to 15% in January 2026, paused, and subsequently raised it in two 50-basis-point steps to 16%. Through most of 2025, it kept a tight stance to support FX market sustainability and keep inflation expectations in check as inflation, peaking in May and then slowing, remained above forecast at times and underlying pressures from wages, labor shortages, energy costs, demand and war-related disruption persisted. Late in 2025, the risk balance turned more hawkish, with greater emphasis on energy shortages, larger budgetary needs and uncertainty over external assistance, even as harvests and official financing supported disinflation and reserves.
After the January cut, the NBU held at 15% as inflation rose on energy and fuel prices linked to the war in the Middle East, hryvnia weakness and faster wage growth, before raising it to 15.5% as persistent pressures from logistics, wage and energy costs continued despite increased raw food supply. Most recently, it raised the key policy rate to 16% in view of persistent underlying price pressures, second-round effects from supply shocks and higher medium-term inflation risks, after consumer inflation accelerated to 8.1% year on year in August, primarily on a greater-than-expected rise in fuel prices amid escalation in the Middle East and faster increases in administered tariffs due largely to Russia’s attacks on critical infrastructure. The increase aims to support the attractiveness of hryvnia assets, maintain FX market sustainability, keep inflation expectations in check and return inflation toward the 5% target, while the NBU said it stood ready to tighten further if risks intensified or consider easing if the security situation noticeably weakened consumer demand and the labor market.